By Lloyd Gumbo
Government has, with immediate effect, reduced the mandatory petrol blending ratio from 15 percent ethanol to five percent, citing low sugar cane supplies.
The 15 percent ethanol component had significantly stabilised the local retail price of petrol. The reduction in the blending levels is a result of low sugar cane supplies at Chisumbanje Ethanol Plant owing to heavy rains received in the area recently.
Given the cane supply challenges, Energy and Power Development Minister Samuel Undenge said blending levels should be reduced temporarily with immediate effect until the situation improves.
“Taking into account the limited production of ethanol and the need to ensure uninterrupted deliveries of petrol to service stations countrywide, I, with immediate effect reduce mandatory blending level from E15 to E5.
“This position shall be monitored and reviewed in light of any new material developments regarding the production and supply of ethanol,” said Minister Undenge.
Although there have been challenges in terms of ethanol supply, said the minister, the country had been receiving adequate ethanol for uninterrupted blending at E15.
“Regrettably, it was not possible to build up ethanol stocks. With the onset of the rainy season, heavy rains have been falling in Chisumbanje for the past week, rendering the fields inaccessible to cane harvesters due to the wet clay soils. This in turn has resulted in reduced production of ethanol.
“Once the rains stop and the soils are dry enough, cane harvesting and ethanol production will resume.”
The current situation has led to calls for Green Fuel to build up adequate stocks to see it through the rainy season.
Minister Undenge said the situation was likely to persist, adding that the development was not peculiar to Zimbabwe.
He said as far as the law was concerned, all petrol sold in the country was to be blended at a ratio prescribed by the Minister from time-to-time on the basis of prevailing conditions.
Green Fuel is a joint venture between Arda and Macdom and Ratings Investment owned by business mogul, Mr Billy Rautenbach.
Arda board chairperson Basil Nyabadza said the latest reduction of blending ratios was done in consultation with “key stakeholders”.
“We totally agree with the minister’s statement and I should make it clear that this is a common development in countries that produce ethanol. The challenge we now have is to build sufficient stocks for retention during the rainy season. Let me assure Zimbabweans, especially the motoring public, that full production will resume as soon as it’s practical,” said Nyabadza.
Chairperson of the Parliamentary Portfolio Committee on Youth, Indigenisation and Economic Empowerment Justice Mayor Wadyajena said while the reason for reduction in blending levels was indisputable, it was the inconsistency in supply that affected the fuel sector.
“It is important that Green Fuel builds up adequate reserves for use during the rainy season. It is not the first time that flooding in Chisumbanje has affected the blending levels, so that problem has to be addressed,” he said.
“We cannot allow a situation where fuel prices keep changing significantly due to lack of consistency. The fuel industry is a sensitive sector, so it is important that there is some consistency,” said Wadyajena.
The pump price for petrol blended at 15 percent level to ethanol and 85 percent to petrol ranges between $1.47 to $1.52 and those prices are expected to increase when only five percent is blended.
Already some areas such Bulawayo are beginning to have fuel shortages due to reduced supplies. The Herald